Move at Ethanol Plants is Changing DDGS

Distillers Dried Grains with Solubles may have less oil that in the past, which requires some trade work. In Japan, the product must be recertified for import.

May 03, 2012

The United States Grains Council is working with Japan's Ministry of Agriculture, Forestry and Fisheries to register the new, low-oil/fat dried distillers grains with solubles for feed use in Japan. The work is required because ethanol plants, in an effort to squeeze more profit from every bushel of corn they buy, are moving toward a kind of fractionation technology that allows separation of the oil from corn before it goes into the fermenter to make ethanol.

Move at Ethanol Plants is Changing DDGS

"Japan is our top international partner," said Tommy Hamamoto, USGC's Country Director in Japan. "Last year, in terms of U.S. exports, Japan was number one for corn, number three for sorghum, number four for barley, and number six for DDGS. We have excellent relationships with MAFF, and we are working closely with them to make sure re-registration proceeds smoothly."

The challenge is the move by ethanol companies to pull the oil out for an added income stream. This creates a lower-oil/fat DDGS. USGC explains that all feed ingredients used in Japan must be registered with MAFF and appropriately labelled for nutritional content. The current DDGS registration includes a tolerance level to accommodate routine, naturally occurring variations in the products. The recent trend by ethanol plants to pull the oil out is yielding a product significantly lower in oil and fat that is likely to exceed the existing tolerance levels. This requires the newer DDGS to be re-registered as a new product.

USGC is in the process of contracting for feeding trials and analytical testing to meet MAFF"s registration requirements. " If all goes smoothly, and we expect that it will, we will accomplish the re-registration this year without any disruptions to this valuable trading relationship,” Hamamoto said. “The active, hands-on leadership of Zen-Noh is a big help in keeping this process moving smoothly.”